Painted Hills is named after the colorful layers of its hills corresponding to various geological eras, formed when the area was an ancient river floodplain and by the erosion of red sandstone, forming isolated peaks and steep stratified outcrops. The black soil is lignite that was vegetative matter that grew along the floodplain. Its special geological structure, combined with long-term desert conditions, freeze-thaw peeling, and wind and water erosion gave rise to its present appearance.

Danxia topography is formed by folding of layered oceanic crust. Exposed slanting rock layers have different colours, textures, shapes, sizes, and patterns.

The combination of differences in density and erosion create towering peaks, cave holes, and stone halls.

Zhangye Danxia is known for the unusual colours of the rocks, which are smooth, sharp and several hundred meters tall. They are the result of deposits of sandstone and other minerals that occurred over 24 million years. The result, similar to a layer cake, is connected to the action of the same tectonic plates responsible for creating parts of the Himalayan Mountains. Wind, rain, and time then sculpted extraordinary shapes, including towers, pillars, and ravines, with varying colours, patterns, and sizes